Countdown to CoFI: FMA works to complete licensing

The regulator says it is on track to approve 77 licence applications under the incoming Conduct of Financial Institutions (CoFI) regime which takes effect at the end of March.

Banks, non-bank deposit takers and insurers must all be licensed under the Act, which requires them to have a programme in place for treating customers fairly and bans targets-based sales incentives. Distribution of products is also covered by the fair conduct principle, meaning intermediaries’ role needs to be documented and everyone is expected to work together when issues of fair conduct arise.

Of the 77 total applications received, 3 are still being processed, says the FMA but all are expected to be completed by the end of the month. The current number of licensed institutions is below the 100 initially estimated when applications first opened in 2023.

Institutions are taking their compliance seriously, says Tim Williams, Chapman Tripp Partner and Financial Services Regulation specialist, who has been helping clients prepare for the new regime.